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. Last Updated: 07/27/2016

Communications Go Global in Bid for Cash

Russian communications operators are making moves to generate cash by providing international services.

Long-distance telephone monopoly Rostelecom is negotiating with inter-continental operators with the hope of providing them with transit services.

Gazprom subsidiary Gaztelecom is laying its fiber-optic cables along gas pipelines in an attempt to offer its services in all countries through which Gazprom gas is transported.

"A possible solution to the expected drop in Rostelecom's income could be to offer telephone transit to foreign communications operators from Europe to Southeast Asia," Valery Yashin, general director of Svyazinvest, announced Wednesday at an international congress on telecommunications and information.

Rostelecom will have two of the biggest companies in the world to compete with in this area: FLAG and SEA-ME-WE 3.

The FLAG line, or Fiberoptic Link Around the Globe, stretches 28,000 kilometers and links Britain with Hong Kong.

The SEA-ME-WE 3 line — South East Asia-Middle East-Western Europe line — was launched in August

1999 to compete with FLAG.

It is 39,000 kilometers long and joins Australia to Germany via Singapore.

Gaztelecom plans to enter the international market without outside help.

Rostelecom's income is expected to fall after Svyazinvest restructures, and part of Rostelecom's local traffic will be passed on to holdings in the seven federal districts.

Troika Dialog analyst Yevgeny Golosny estimates Rostelecom could lose 25 percent of its total income through the reorganization.

Rostelecom deputy general director Pavel Alpetyan said that international transit comprises an "insignificant portion" of Rostelecom's overall income.

Yashin said Svyazinvest and Rostelecom are holding negotiations with at least three intercontinental communications corporations in the hope of offering Rostelecom's services.

Rostelecom also faces competition from communications operators affiliated to particular ministries and departments.

Transtelecom, the Railways Ministry's operating company, has announced its desire to establish itself on the transit services market.

The Communications Ministry has yet to approve its decision to issue a second license for international communications, and now Transtelecom wants to carry out its plan in partnership with Rostelecom.

"We are trying to negotiate with Rostelecom for joint work in the area of providing international transit services," said a top Transtelecom manager. Rostelecom has yet to show any interest, he added.

Gaztelecom plans to enter the international market without outside help.

Gazprom will begin a $200 million project to construct two major fiber-optic cables along the Blue Stream pipeline between Moscow and Istanbul and along the Yamal-Europe pipeline between Moscow and Berlin in the second half of 2001, said Gazprom board member Bogdan Budzulyak.